The Leading eBooks Store Online 4,391,687 members ⚫ 1,493,850 ebooks

New to eBooks.com?

Learn more

Deleveraging After Lehman--Evidence from Reduced Rehypothecation

Deleveraging After Lehman--Evidence from Reduced Rehypothecation by James Aitken
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
Rehypothecation is the practice that allows collateral posted by, say, a hedge fund to their prime broker to be used again as collateral by that prime broker for its own funding. In the United Kingdom, such use of a customer’s assets by a prime broker can be for an unlimited amount of the customer’s assets. And moreover, there are no customer protection rules (such as in the United States under the Securities Act of 1933). The paper shows evidence that, following Lehman’s bankruptcy, the extent of rehypothecation has declined substantially, in part because investment firms fear losing collateral if their prime broker becomes insolvent. While less rehypothecation reduces counterparty risk in the system, it also reduces market liquidity.
International Monetary Fund; March 2009
13 pages; ISBN 9781452718798
Read online, or download in secure EPUB or secure PDF format
Title: Deleveraging After Lehman--Evidence from Reduced Rehypothecation
Author: James Aitken; Manmohan Singh